Property Law. A right of reentry or power of termination is a future interest that is created in the grantor when a fee simple subject to condition subsequent is created in the grantee (e.g., A conveys property to B provided that the land is used only for residential purposes, and if used for any other purpose, then A may reenter the property and take the land back).
McDougall v. Palo Alto Unified School District, 212 Cal. App. 2d 422 (1963):
In the conveyance at hand we encounter no difficulty in concluding that a fee simple determinable rather than a fee simple subject to a condition subsequent has been created. The Restatement defines the latter estate as follows: ‘An estate in fee simple subject to a condition subsequent is created by any limitation which, in an otherwise effective conveyance of land, (a) creates an estate in fee simple; and (b) provides that upon the occurrence of a stated event the conveyor or his successor in interest shall have the power to terminate the estate so created.’ (Rest., Property, § 45.) The corresponding future interest created is termed a right of re-entry for condition broken. As the author of the opinion in the Alamo School District case states ‘[a] right of entry for breach of condition is clearly recognized in California. In classical theory, it was distinguished from the possibility of reverter by the fact that it was not a limitation upon the estate granted—not a measure of its duration—but a condition upon the occurrence of which the granted estate could be cut off by re-entry of the grantor. An example of such a conveyance would be one of a fee simple ‘upon condition that, if St. Paul’s falls, the estate shall terminate.’ The effect is not to terminate the estate automatically, as a reversion does, but to give the grantor a right of reentry, the estate terminating only if the right is exercised.’ (Alamo School District v. Jones, supra, 182 Cal.App.2d at p. 185, 6 Cal.Rptr. at p. 275.)
Both a fee simple determinable and a fee simple subject to condition subsequent involve divesting upon the occurrence of the stated event. The problem presented in such cases is to determine whether the fee simple is to terminate automatically or only upon the exercise by the grantor, his heirs or assigns of the right of re-entry. (Simes and Smith, op. cit., p. 344; Powell, op. cit., p. 40.) Constructional preference *435is for the fee simple on condition subsequent and language of condition facilitates the adoption of such preference and the rejection of a fee simple determinable. (Powell, op. cit., pp. 37, 40–41.) As stated in Henck v. Lake Hemet Water Co., supra, 9 Cal.2d 136, 140, 69 P.2d 849, 851 ‘[t]he difference is a distinct one, and, in the case of a determinable fee which terminates upon the happening of the contingency, the estate is at an end without any further act on the part of the defendant; while in the case of a vested estate subject to defeasance upon condition broken—a condition subsequent—the defendant, upon the happening of the contingency, is entitled only to the right to terminate the estate, or a right of re- **45 entry.’ (See Renner v. Huntington, etc., Oil & Gas Co. (1952), 39 Cal.2d 93, 98, 244 P.2d 895.)
‘Generally speaking, the apt and appropriate words, evidencing that the grant is on condition subsequent, are found in a provision for forfeiture and right of re-entry.’ (Fitzgerald v. County of Modoc (1913), 164 Cal. 493, 495, 129 P. 794, 44 L.R.A.,N.S., 1229.) In the Restatement of Property it is said that, with exceptions not here applicable, ‘an estate in fee simple subject to a condition subsequent is created by an otherwise effective conveyance which contains 1. some one of the following phrases, namely, ‘upon express condition that,’ or ‘upon condition that,’ or ‘provided that,’ or a phrase of like import; and also 2. a provision that if the stated event occurs, the conveyor ‘may enter and terminate the estate hereby conveyed,’ or a phrase of like import.’ (Rest., Property, § 45, com. j.)
Abboud v. Lakeview, Inc., 223 Neb. 568 (1986):
The deed granted Seymour Lakebed to the City on the following condition:
Provided further that the above described premises shall be used by the grantee solely for purposes of a public park and public recreational area, and upon the use thereof by Grantee for any other purpose, the grantor may declare its re-entry upon said premises and upon such re-entry or declaration thereof, the above-described property shall revert to and become the property of grantor.
This language created a fee simple condition subsequent. See C. Moynihan, Introduction to the Law of Real Property, ch. 5, § 6 (1962). In this estate the grantor or its heirs or assigns hold a future interest called a right of reentry, or, more commonly, a power of termination. Clarke v. Sisters of Society of the Holy Child Jesus, 82 Neb. 85, 117 N.W. 107 (1908). If the grantee does not adhere to the conditions in the deed, the grantor may exercise its right of reentry in an action to terminate the estate, such as an action in ejectment. See Volkmer, The Law of Future Interests in Nebraska, 18 Creighton L.Rev. 259 (1985). As long as this does not occur, the grantee holds a possessory fee simple condition subsequent and the grantor holds a future interest in its right of reentry.